FAQs on Filing for Bankruptcy In Detroit Michigan

A state of diverse economy and majorly known as the center of the U.S. automotive industry, there is no wonder that the state witness a huge monetary transactions and a number of legal issues germinating from these exchanges. We mainly focus on the issue of bankruptcy in our following article. While in general, the filing process for bankruptcy is similar to that of other U.S. states. There are a few Michigan-specific information to be kept in mind depending on the Michigan Law.

As a resident of Michigan, where should I file for Bankruptcy in particular?

This entirely depends on which part of Michigan are you from. Michigan is divided federal judicial districts-Eastern and Western district the bankruptcy courts are similarly divided and the main courts for east and west districts are in Detroit and Grand Rapids respectively. You can file for Bankruptcy either from the district where you have lived for more than 180 days before filing bankruptcy or where you maintain a permanent residence though you have been living away temporarily.

What is the state median for Michigan and am I eligible for filing Bankruptcy under Chapter 7 Bankruptcy in Michigan ?

As on 2015, Michigan state median for an average family of four was $63,893 annually. In case your average income for six months before filing for bankruptcy is less than this median you are eligible for filing bankruptcy. In case this is not so, you have to go through a string of tests to be considered as eligible for chapter 7 bankruptcy.

Are there any special exemptions under Michigan Bankruptcy Laws?

Michigan bankruptcy Laws allows the debtor more flexibility to be able to protect a larger part of their properties and they can choose between state and federal exemptions. Exemption up to $$56,650 is allowed for those over 65 years age or differently able. Other than that homeowners and their dependants are exempted up to $37,775 of their interests on housing or similar properties. For more info on homestead exemption .

Which form should I fill up for filing Bankruptcy in Michigan?

Besides bankruptcy petition, the debtor has to go through a complex calculation called the “means test” for chapter 7 and similar test for chapter 13 bankruptcies as well. Forms 22A and 22C or Statement of current monthly income and Means Calculation Test (for chapter 7 bankruptcy) and statement of Current Monthly Income and Calculation of Commitment Period And disposable Income (For chapter 13 bankruptcy) namely should be filled up according to the bankruptcy chapter under which you choose to file. These forms provide the debtor a list of expenditure that includes rent, food, and childcare. These comprise of the Standard deduction figures in Michigan.

It can be concluded that while there are differences in the federal laws all over US, they are not altogether vastly different or complex. A little prior research before filing for bankruptcy can help a lot with your future decisions.

You don’t have to be psychic to know why you are in our office. Most people are not “deadbeats” or “people who just spend too much” they aren’t “immature and irresponsible”. Bad stuff happens to good people. Plain and simple. There are 3 main reasons people need to file bankruptcy:

1.Job Loss or Loss of Income

2.Divorce/Separation

3.Medical Issue

Job Loss or Loss of Income:

Job Loss is a catastrophic event for anyone involved. Suddenly your security is ripped away and you feel terrified, alone and, sometimes, sadly, worthless. There is no crime in losing your job and no reason to feel like less of a person. You are amazing, your industry has lost out when they lost you. Now is time to use bankruptcy to help you eliminate those bills hanging over your head leaving you free to reevaluate what you want to do with your life and get on with it!

Loss of Income can be as devastating since you still have income just nowhere near enough. Now you start robbing Peter to pay Paul. You start juggling bills and losing sleep trying to figure out who to pay this month and who can wait a month. Unfortunately, we have learned that eventually Peter peters out and that snowball becomes an avalanche.

Research tells us that most people wait 2 years after job/business loss, loss of income to actually come into our office to get help. Unemployment has run out, they have tapped all their relatives and they are at the end of their rope. We only wish they would have come in sooner. Why go through all this unnecessary suffering when a solution is a phone call away?

Divorce/Separation:

Divorce is hard enough without the added stress of bills that need to be paid. Both parties are trying to heal and move on with their lives and this process is complicated by all these debts that have to be paid – but how? One household is now two – two times the expenses PLUS all the bills from pre-divorce. Add in the divorce attorneys bills, child support and alimony. No one escapes divorce unscathed.

Medical Issue:

Medical Issues now account for a large percentage of the bankruptcies filed in the U.S every year. Elizabeth Warren, a professor at Harvard, conducted a research study in 2007 which concluded that bankruptcies had increased by nearly 50 percent in the six-year period, from 46 percent in 2001 to 62 percent in 2007. She found that most of those who filed for bankruptcy were middle-class, well-educated homeowners.

“They concluded that 62.1 percent of the bankruptcies were medically related because the individuals either had more than $5,000 (or 10 percent of their pretax income) in medical bills, mortgaged their home to pay for medical bills, or lost significant income due to an illness. On average, medically bankrupt families had $17,943 in out-of-pocket expenses, including $26,971 for those who lacked insurance and $17,749 who had insurance at some point.” Medical bills prompt more than 60 percent of U.S. bankruptcies June 05, 2009 |By Theresa Tamkins

Even given the huge increase in filings in 2005 due to the panic over the “new law” bankruptcy changes, it is clear that medical bills/issues account in one way or another, for a large percentage of the bankruptcies filed in the U.S.

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We know that no one wants to file bankruptcy. It’s not a life goal for most people, but it can be a necessity for survival. Life happens and we do what we have too to survive. The bankruptcy laws are there to give you the opportunity to clean your slate and get a fresh start. Come in and let us discuss your options and what the best course of action is for you. We are here to help!

So you have retained our office for bankruptcy. What happens next?

When you retain with our office you will be given some information. Most importantly you will receive the homework package, a document checklist, and credit counseling information. The homework package needs to be filled out as completely as possible so that we are able to complete your bankruptcy paperwork that will be filed with the court. The documents on the checklist are required by the trustee and we need to provide them to the trustee before your hearing date. The credit counseling must be done at least one day before your case can be filed. The certificate is only good for 180 days (about 6 months) so we recommend you try to do it as close to before your signing appointment as possible. We don’t want to have you do the credit counseling, have something come up that delays a final payment or your signing appointment and then you have to do the credit counseling again.

The signing appointment is made with our office when: you are paid in full to file, we have your homework package, your credit counseling certificate, and we have most – if not all – of the applicable documents on the document checklist. At this appointment you will first review the paperwork to make sure you do not see any errors. You will then meet with the attorney and he will go over all of the documents with you, make any necessary changes, and have you sign them. You will receive a copy of everything you have signed at this appointment and these documents are what we will be filing in your case.

You signed the paperwork, you did the credit counseling, and you provided us with the document checklist documents.

Your case is filed!

Once we file your case the court generates a case number right away you can call us to get the case number for your records if you wish. A few days after filing, the court also generates a hearing date and sends us a hearing notice (they will also send you a copy of this). The hearing date is scheduled for generally 30 to 40 days after the date of filing. When we get that hearing date we will send you a letter letting you know when it is, what time to be there, where to go, any documents we still need from you, and what to take to court with you. If you are filing a chapter 13 your letter will also have information about your confirmation hearing date and time.

FOR CHAPTER 7’S BANKRUPTCY:

Once you have the hearing the court has to wait at least 3 months before issuing a discharge. They have to wait this time in all cases to make sure no creditors have objections or make sure there is nothing else that the trustee or court have issue with. Your discharge will be filed about 3-4 months after your hearing date. If it has been 4 months since your hearing and you do not have a Notice of Discharge from the court or a card from our office, call us and we will find out what is holding it up.

FOR CHAPTER 13’S BANKRUPTCY:

At least one month after your first hearing you have a confirmation hearing. During the time between hearings you are to be making payments as stated in your Plan. At the confirmation hearing the court will approve your Plan and your case will continue for 36 or 60 months as stated in the Plan. The attorney will have gone over all the parts of the plan with you before your case was filed.

For the life of your case you will be required to submit your tax returns to our office so that we can send them to the trustee. If your plan states, you may also be required to submit your tax refunds to the trustee to go towards your Plan payments.
Once your Plan is complete, the trustee will do an audit (which can take up to 6 months but they will have stopped taking out payments at this point) and begin closing the case. You will receive documentation about this. You will receive a Notice of Discharge once your case is discharged and you will receive a card from our office.

We get asked this all the time. There are a series of time constraints on when you can file another bankruptcy if you have had successfully discharged bankruptcy.

Here’s how it goes:

From date of FILING

Chapter 13 to Chapter 13 is 2 years.
Chapter 7 to Chapter 13 is 4 years.
Chapter 13 to Chapter 7 is 6 years (if your plan paid under 70% to your unsecured creditors).
Chapter 7 to Chapter 7 is 8 years.

There are subtleties to the law that can be confusing yet can be overcome. Don’t look at these dates and think you can’t refile. Odds are you can. This is what we specialize in. We can help you, please feel free to call!

I’m Broke! I Need a Cheap Bankruptcy Lawyer !

I Know everyone price shops, heck I do too but lets put price shopping your attorney in perspective. If you needed heart surgery would you price shop the doctor you need to save your life? Would you really want the cheapest doctor or the one with the most experience in the field you need? Why are you looking for the cheapest person to entrust your financial future to?

Instead of price shopping your attorney shop their EXPERIENCE. Look for an attorney who has been doing BANKRUPTCY for at least 11 years. Why 11 years ? Because they know the law before and after the changes made in 2005. You need someone who KNOWS what they are doing, without question.

An Attorney Can Only Show You The Right Track

The rules governing bankruptcy are complex. There are many documents which need to be filed and numerous deadlines to be met. Many debtors who start their cases without legal representation soon find themselves in a position where they need legal advice.

Bankruptcy Attorney -Abetterwaybankruptcy.com

From the attorney’s standpoint, it is much easier to review a potential client’s case prior to filing than to rework a case which has already been filed with the court. If the case is filed correctly the first time, the case will move more smoothly through the bankruptcy process than if multiple corrections need to be completed.

Furthermore, there are requirements to produce a volume of documents to the Trustee’s office which support the claims made in the petition and schedules. Experienced lawyers will know what is required prior to filing a case, and will have provided these documents to the appropriate parties prior to any hearings.

An experienced attorney will also know how to list and protect the debtor’s assets. These exemptions can be confusing if you are not familiar with the bankruptcy code. Those of us who practice in this area of law can all recall at least one instance when a debtor chose to represent themselves, didn’t protect a piece of property, and had the Trustee’s office attempt to collect the property to sell it for the benefit of creditors. This does NOT have to be the case.

At A Better Way Bankruptcy, we have over 40 years of professional experience having filed thousands of cases with the Bankruptcy court. Why hire an attorney? We know what the courts are looking for, we know the deadline schedules, and we know at the end of our consultations what will work best for you to get you the relief you need. Let our experience make the process easier for you. We will take away your headaches so you can sleep at night knowing your case is in good hands. We are with you every step of the case, and we will show you there is A Better Way.

Making the decision to file for bankruptcy is often a difficult choice. It is never a goal set on your life’s “bucket list.” That is why there are procedures in place that help individuals who find themselves stuck in a financial trap looking for a means to escape. So now that you have committed to asking for relief that only the bankruptcy court can provide, the next decision is which chapter is right for you.

Chapter 7 bankruptcy is basically a straight “wipe out” of debt with some exclusions. Exclusions tend to be areas where you may owe the government money in some fashion, such as child support, income tax liabilities, or student loans. Also, if you have any asset valued over and above what the Bankruptcy Code will allow you to protect, the trustee will liquidate the asset and use the proceeds to divide evenly among your creditors according to some basic guidelines. Debtors in Chapter 7 bankruptcy may keep certain obligations, such as homes and cars, as long as they are current on the payments, have full coverage insurance on the asset, and can afford the monthly payments.

Chapter 13 bankruptcies, on the other hand, are repayment plans where you are paying pennies on the dollar depending on what you can afford. Chapter 13 bankruptcy is most frequently used to save homes from going into foreclosure or to restructure vehicle payments where the vehicle is now in danger of repossession. These repayment plans can go anywhere from three to five years, depending on the nature of the debt and how much money it will take to remedy the situation. Sometimes Chapter 13 bankruptcies are used for debtors who have some money to pay creditors, but not enough to pay all the creditors everything the creditor wants. Each Chapter 13 bankruptcy plan is drafted on a case by case basis, as every repayment plan is unique to the debtor.

If you have filed for bankruptcy under Chapter 7 in the past, you may not be eligible to file another Chapter 7 petition just yet. Currently, you may file a subsequent Chapter 7 petition eight years after the filing date of the previous Chapter 7. If you start struggling with your creditors again during this period, a Chapter 13 repayment plan may be the best option for help. Chapter 13 plans may also be used to help you keep and protect an asset that you may have lost had you filed a Chapter 7 petition. Lastly, while you cannot discharge certain liabilities, such as child support or student loans, in a Chapter 7, you may find an easier payment method through the Chapter 13 Plan of Reorganization.

Chapter 13 plans are not set in stone, though. As attorneys, we realize that life happens, and sometimes the repayment plans we draft to save our clients homes do not account for the same homes being blown away in a tornado or having the basement fill with eight feet of water. In these situations, if the debtor has decided to walk away from their homestead, or what’s left of it, the Chapter 13 Plan may be converted to a Chapter 7 with a little additional paperwork and a hearing.

The best way to figure out which chapter is right for you given your circumstances is to make an appointment for a free consultation with A Better Way Bankruptcy. We can help you determine what the plan payment would be in a Chapter 13, or if Chapter 7 and it’s almost immediate “fresh start” are right for you. As your personal bankruptcy attorneys, we care about you as an individual. As long as you keep us informed of your situation, we will counsel you on how best to proceed in the future. Let our over 25 years of experience guide you through these tough times to find that light at the end of your tunnel.

Give a fresh start for financial freedom through bankruptcy

Bankruptcy is a new beginning, not the end of the world.

In days long past the word “bankruptcy” had such a stigma attached to it that the average person or family could run the risk of being thought of as a pariah, ostracized by family and friends, excommunicated by their places of worship, even attacked by the very creditors that they needed protection from.

Thankfully, today the perception of bankruptcy is very different. Our modern society is so dependent on the availability of credit to make both major and minor purchases that bankruptcy has become an everyday occurrence, with filings being from every rung of the social and economic ladder. Whether your personal perception of someone or some business entity filing for a bankruptcy is a positive one or a negative one, the reality is that for the foreseeable future, bankruptcy is here to stay.

Bankruptcy has been a facet of the United States government as far back as 1800 under President Thomas Jefferson. While many changes have been made from the earliest days, the core ideal of bankruptcy remains unchanged; Provide protection to an individual or business that no longer had the ability to repay debt that they incurred legally. Sounds simple enough, however more than 200 years ago, you simply could not be the one that took advantage of that protection because the personal consequences you would suffer, would in most cases be far more severe than anything a creditor could do to you.

However, in the United States today, everyone is filing for bankruptcy. Ok, maybe not everyone, but the list of famous people that have had to file for bankruptcy is a veritable who’s who of Hollywood and the professional sports world.
Toni Braxton, Walt Disney, Sherman Hemsley (George Jefferson), Don Johnson, Larry King, Willie Nelson, Wayne Newton, Burt Reynolds, Donald Trump, Mike Tyson and Michael Vick have all filed for bankruptcy, and many have made the best out of a bad situation and have become as, if not more wealthy than they were before filing bankruptcy.

Now of course, as a reader of this article it is very likely that you are not a movie star, professional athlete, or business mogul but the principal of bankruptcy still stands as it did when Milton Hershey (founder of Hershey Chocolate Company) filed in 1882, that a fresh start financially can give you the opportunity to regain control of your finances and let you start to rebuild wealth without dragging along excess baggage.

Now of course when you do finally transform your current situation of excess debt and a mountain of bills into one of being debt free and building toward a brighter financial future, it is doubtful that they will put your picture on the fifty dollar bill, but every time you see one, keep in mind that even Ulysses S. Grant, the 18th President of the United States, filed for bankruptcy in 1884.

Alright, enough of the history lesson, well sort of. How many times have you said to yourself, “If only I would have been able to do (insert random mistake here) again and do it differently”? Well, I personally could write a book on my “do-over” list, but it might take some of the luster off of your opinion of me and I don’t want that. But I assume that your story contains just as many moments that you would like to do differently as mine does. While you may not be able to reconsider who you chose for a wife/husband, choose a different college degree to pursue, or which career path you chose, how poorly you handled your finances and credit, or if it was a one-time event that caused you to be overwhelmed by debt is one area where you can get a fresh start and truly begin anew.

Just imagine how much easier your life could be if only you could obtain credit, whether for a credit card, automobile, or home mortgage loan at the same interest rates that the banks offer to their highly desirable “very good credit” borrowers. As an example if you had a mortgage loan for $100,000 and your interest rate is 8.75% (poor credit), your monthly payment for the principal and interest would be $786.00 per month, conversely if you had the same $100,000 mortgage at 3.5% (very good credit) you would be paying only $449.00 per month. That is a savings of $337.00 per month and the only difference is your credit score. So how does bankruptcy fit into your boosting your credit score from poor credit to very good credit? The answer is actually quite simple. When you have a fresh start financially you begin to rebuild your credit rating almost immediately. Think of it as ripping a bandage off quickly, sure your credit score is going to be affected by the bankruptcy filing, but if your credit is already poor, this is the least of your worries. With simple regular maintenance and repaying your bills on-time going forward, your credit rating will begin to rise almost overnight. It is not unusual for someone that filed a Chapter 7 Bankruptcy to add one hundred or more points to their credit score within the first year without doing anything but paying their ongoing bills on time.

Want to purchase a new home or refinance the one you are currently living in? The popular misconception is that since bankruptcy remains on your credit for ten years that buying a home or refinancing your mortgage is impossible. However, the reality is that a homeowner or someone looking to buy a home can do so in
three years after a bankruptcy. Mortgage financing is usually the most difficult credit to obtain, automobile financing and credit cards are available much sooner.

If you are truly looking for a fresh start to your financial life, bankruptcy can be the first step toward total financial restoration and open doors to previously unavailable credit, savings and wealth.

Now is the time to maximize your potential by erasing your debt and moving forward.